Accra, Nov. 27, GNA - Dr Chris Itsede, Director-General of the West African Institute for Financial Management (WAIFEM), said on Monday that a good government securities market was essential to facilitate the achievement of monetary objectives.

In a speech read for him by Mr Arthur Ankrah, Director Financial Sector Management Department of WAIFEM, at a regional workshop on pricing and marketing of Government Securities, Dr Itsede said the securities market was an alternative to central bank funding of budget deficit because of its minimal distortion on monetary policy. Besides, it provided instruments for effective monetary policy management.

The one-week course is necessitated by the growing pressure on most countries to bridge financing gaps through reliance on domestic sources and also because domestic mobilisation is crucial to the launch of the West African Monetary Zone.

Dr Itsede said the existence of such a market could enable the Government to respond to shocks, he said.

He said when a Government Securities Market was complemented with a sound domestic debt management strategy; it could relax the fiscal burden by reducing debt service costs over the medium to long term period thereby reducing Government exposure to interest rate and other financial risks.

At the microeconomic level, such a market could strengthen overall financial stability, enhance financial intermediation and spur competition among financial services providers.

"As Government and Private Sector Securities Markets develop, commercial banks tend to develop related financial infrastructure and products and intermediate credit more competitively." But for a successful development of the Market, conditions such as a sound macro-economic policy framework, prudent and sustainable fiscal policies, property rights and an effective legal, tax and regulatory infrastructure are required.

Also important are efficient and secure settlement mechanisms and a liberalized financial system.

Dr Itsede called for the nurturing of primary dealers while a secondary dealer system was being evolved.